Correlations in binary options strategies

Therefore, the trader can trade the change in crude oil prices on the binary platforms as follows:. This allows the interplay between the USD and crude oil to fully manifest itself. Gold and Inflation Gold has traditionally been treated as a safe haven asset which traders buy into in times of economic crisis, or in times when market participants are in capital preservation mode. However, when capital is depleted as it will be if the crisis lasts long enough , traders may then trade in their gold stores for cash, leading to a gold sell-off.

So it is not a wise idea to trade gold simply on expected demand during crisis periods in the financial markets. Rather, it makes more sense to trade gold as an asset correlated to inflation. This is because gold is better used as a hedge against inflation and not just as a safe-haven, capital preservation asset.

Central banks commonly use interest rates as a way to defeat inflationary pressures. So whenever there is an expectation of inflationary pressure on the economy of a country, it brings an expectation that rates will go up. This brings on a risk-on sentiment to the market, with traders willing to back up such expectations with an increase in gold demand.

This is because gold and the USD are inversely correlated. For the binary options trader, watch the inflation reports coming out of Australia and the US, and also watch the Reserve Bank of Australia RBA statements regarding their plans with regards to interest rates, looking closely at the concern they have over inflation.

If you see a hawkish tone in the statement following a rate decision increased or left unchanged with a chance for increase in future , get ready to make a technically-directed entry into gold or the AUDUSD on the CALL side of the trade. Sovereign Debt and Currencies The sovereign debt crises witnessed in Greece, Ireland, Portugal and Spain and the hammering that the Euro took as a result, shows how sovereign debt, credit ratings and the value of the affected currencies are all correlated.

Rather, it makes more sense to trade gold as an asset correlated to inflation. This is because gold is better used as a hedge against inflation and not just as a safe-haven, capital preservation asset.

Central banks commonly use interest rates as a way to defeat inflationary pressures. So whenever there is an expectation of inflationary pressure on the economy of a country, it brings an expectation that rates will go up. This brings on a risk-on sentiment to the market, with traders willing to back up such expectations with an increase in gold demand.

This is because gold and the USD are inversely correlated. For the binary options trader, watch the inflation reports coming out of Australia and the US, and also watch the Reserve Bank of Australia RBA statements regarding their plans with regards to interest rates, looking closely at the concern they have over inflation. If you see a hawkish tone in the statement following a rate decision increased or left unchanged with a chance for increase in future , get ready to make a technically-directed entry into gold or the AUDUSD on the CALL side of the trade.

Sovereign Debt and Currencies The sovereign debt crises witnessed in Greece, Ireland, Portugal and Spain and the hammering that the Euro took as a result, shows how sovereign debt, credit ratings and the value of the affected currencies are all correlated. Credit ratings are assigned by three major credit rating companies: The ratings simply tell creditor nations about the ability of a government or other entity to repay loans taken as sovereign debt government bonds.

National governments are supposed to have the highest ratings because in theory, they are too big to default. But what happens when there is a massive threat of default as hung over Greece and Ireland in to ? This is what happened to the Euro, as it fell from 1. It is an excellent way of supporting your investments and minimizing risk, but it will always need to be part of a bigger strategy. This should not put you off using the strategy, it can be used to help reduce losses or to extend your investments at just the right time without overstretching yourself.

It will take a little practice to get the technique right, but once you have mastered it you will find it an invaluable help; done correctly this tactic will increase your return on investment. Subscribe To Trading Secrets. Tunneling Binary Options Trading: Correlation Strategy and Binary Options. In fact, for most traders the right approach is unique to them simply because everyone has different risk factors.

We do our best to set up a credible fifteen minutes It is considered to be a trading pattern designed in Japan.